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The Indian real estate sector which has been witnessing a slowdown for the last couple of years breathed a collective sigh of relief when the Union budget was presented. It seems the Prime Minister’s vision of “housing for all” by 2022 is on its way to being fulfilled. So what did the budget offer the real estate sector?
REITs not subject to Dividend Distribution Tax. Removing Real Estate Investment Trusts (REIT) from the purview of Dividend Distribution Tax is being hailed as a major step towards making affordable housing a reality. Pass through status for rental income and rationalizing capital gains for sponsors exiting at the time of listing of the units of REITs had already been done in the last 2 budgets. While most people in the industry are welcoming this as the removal of the last irritant for REITs, there are others who feel there’s still scope for an extra push. Bearing stamp duties on properties also need to be looked into although it does not fall in the purview of the state government. Still, asset owners, who had put certain properties on hold, can now look into REITs as a viable option.
Additional interest deduction for first time home buyers. As an incentive to first time home buyers, the finance minister announced a deduction for additional interest of Rs. 50,000 per annum for loans up to Rs. 35 lakh, sanctioned during the next financial year, provided the cost of the house does not exceed Rs. 50 lakh. Industry sources see this as a good push for first time investors.
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